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VA Loans

Coming up with a down payment for a home can seem overwhelming, especially to a first-time home buyer.  However, for veterans, service members, and their families there is a program designed to help them overcome this hurdle.  With a VA loan, you can put no money down and mortgage insurance is not required.

Other mortgage programs such as FHA and conventional require primary mortgage insurance if you put less than 20% down on a home.  There are other fees you need to be sure you are aware of and understand.

VA loans are not just for buying a home either.  It is possible to refinance to do renovations, pay for home improvements, or do debt consolidation.

What is a VA loan?

A VA loan is backed by the US Department of Veterans Affairs.  VA loans are not issued by the federal government.  It is a guarantee that the VA will pay the lender up to 25% of the loan amount if the loan should go into default.

It is possible in most cases to finance 100% of the home and finance the closing costs as part of the loan.

Who Qualifies?

The main requirement is to get a Certificate of Eligibility (COE) from the Department of Veterans Affairs.  Qualifying spouses of service members may also be eligible to receive a certificate of eligibility.  A Certificate of Eligibility is a document from the Department of Veterans Affairs that confirms your eligibility for the VA program.  The document details your VA loan entitlement and if you are required to pay a VA funding fee.  The following link will walk you through to get a Certificate of Eligibility: https://www.va.gov/housing-assistance/home-loans/how-to-request-coe/

Lenders will have their own credit requirements, so it is always good to check with the lender for any additional qualifying requirements.  It is always a good idea to get pre-approved so you know what you can qualify for and be sure the new obligation will fit into your budget.

What are the different types of VA Loans?

  • VA Purchase Loan – To purchase a home that will be your primary residence.
  • VA Cash-Out Refinance – If there is equity in your home, a cash-out refinance can help you tap into that to get funds for debt consolidation or some home improvements
  • VA IRRRL (Interest Rate Reduction Refinance Loan) – This loan is a streamlined refinance process to refinance an existing VA loan. If you are just trying to reduce the interest rate or monthly payment, an IRRRL can be a good choice.
  • VA Renovation and Home Improvements Loan – This option can provide you with a way to get a home that might not meet the standards required for a VA purchase loan. A portion of the loan is used to bring the home up to those standards after purchase.  The loan can only be used to bring the home to standards, not for luxuries or adding structures.

When deciding what type of loan is right for you, it is important to understand how each program works and how they match up with your situation.  We offer free consultations and would appreciate the opportunity to go over your options to see what is best for your situation.